A Vision For The Finance Professional and Finance Function

A VISION FOR THE FINANCE PROFESSIONAL
AND THE FINANCE FUNCTION
SHARING KNOWLEDGE, IDEAS, AND EXPERIENCE
May 2018
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Message from Charles Tilley, IFAC Professional Accountants in Business Committee Chair The Customer Perspective
of the Finance Function:
Opportunities and Challenges
I was shocked by a recent survey where only 8% of CFOs believe they are implementing
processes well! Building Awareness of
the Latest in Digital and
I believe the future for professional accountants working in business and the public sector Technology Developments
is incredibly exciting, but there remains a long way to go to ensure we are relevant to the
future needs of business. There is a clear need to embrace change, acquire the needed Future Finance Vision and
capabilities and skills, and act in accordance with our professional ethics to enable and Development Roadmap
support organizations as they pursue sustainable success.
Taking an integrated approach to our March PAIB Committee meeting, the agenda The Finance Professional
was framed around the key elements of developing a vision and roadmap for finance Profile of the Future
professionals and functions. We focused on the expectations of various customers of
finance; digital disruption and technology; and future roles, skills and competencies. Following the same structure, Key Skills Needed for
this report highlights the key messages arising from the meeting and provides an update on other areas of Technology Competence
importance on the IFAC PAIB agenda.
An effective finance leader and finance function is a key requirement for all organizations. This message was The Accountant Role in
strongly emphasized by our PAIB Committee members who serve as board directors and audit committee Effective Risk Management
chairs. From an independent director’s perspective, trust and confidence in an organization is directly tied to the
competence of its finance leader and finance function. First and foremost to ensure confidence in the controls and Audit Quality and Audit
financials, and then to enable integrated thinking and integrated reporting, focusing on outcomes to support value Committee Effectiveness
protection and creation in a multicapitals context.
In both private and public sector finance functions, a key starting point for developing a vision is to focus on their Professional Ethics
customers’ needs, including those of the board, operations and external stakeholders. The committee began to
explore the expectations on the finance function from other stakeholder perspectives, including considering specific IFAC’s Approach to
challenges facing the public sector and its finance teams. I plan to continue this approach with wider engagement at Professional Accountants in
Business
future meetings.
Digital disruption will significantly impact finance and accounting roles; from business partner to specialist roles in
reporting, tax and internal and external audit. It will involve people working closely with machines and software,
creating a digitally-enabled finance function that is more efficient and enables a much higher contribution to the
business. To envisage this future, we looked in detail at the application of automation in the finance function as well
as the potential of blockchain and distributed ledgers which could considerably impact financial business models,
supply chains and accounting.
In a technology and data driven world, professional accounting skills will remain important. However, in recruiting
talent, business as well as interpersonal and behavioral skills will be increasingly key to our future development. The
roles and skills needed for commercially facing finance professionals are fundamentally changing as the expectation
shifts from providing business rather than technical solutions. Enhancing the effectiveness and efficiency of finance
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increasingly involves multi-disciplinary teams of data scientists, software engineers and architects in addition to The Customer Perspective
finance professionals.
The half-life of knowledge, which represents the amount of time that elapses before half of the knowledge one
has acquired is superseded, is rapidly reducing and could be under 5 years before long. A PAO’s role in providing Building Awareness of
continuously relevant professional education, as well as useful lifelong learning and continuing professional
Technology Developments
development, has never been greater. However, traditional education approaches and career pathways are being
challenged, meaning PAOs, organizations and education providers need to rethink their respective roles and
Future Finance Vision and
relationships. Development Roadmap
I encourage all PAOs to ensure they develop and frequently refresh their competency frameworks to support their
professional qualification and continuing professional development (CPD) to maintain their relevancy in both the The Finance Professional
private and public sectors. Profile of the Future
Asserting and maintaining relevance for professional accountants in business is a significant challenge and an
enormous opportunity for the profession and PAOs. To help, I encourage you to use the Self-Assessment Evaluation Key Skills Needed for
Tool released in January to help take a strategic and practical approach to enhancing relevance. I also encourage Technology Competence
PAOs to continue to put forward strong and diverse candidates for nomination to the PAIB Committee.
At our meeting, we reflected on our own committee’s purpose and way of working which will lead to articulating The Accountant Role in
a clear business model for the committee that demonstrates how we creates value in supporting IFAC and the Effective Risk Management
profession. Our thinking will provide input in the development of IFAC’s strategy beyond 2019. I look forward to
sharing our approach later in the year. Audit Quality and Audit
Committee Effectiveness
I trust you find this report of value as a means to keep connected to the discussions we have at PAIB Committee
meetings. I greatly value your continuing help in ensuring that the PAIB Committee addresses your needs so I very
much welcome your feedback and involvement in the PAIB agenda. Professional Ethics
Charles Tilley IFAC’s Approach to

Professional Accountants in
Business
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Main Themes The Customer Perspective
Developing a vision and roadmap for the finance professional and finance function is a journey requiring an Opportunities and Challenges
iterative and experimental approach, supported by a development plan that incorporates significant thinking on the
Building Awareness of
customer perspective of finance; digital and technology developments and implications; and the future profile and
skills of the financial professional. The vision is important to provide a sense of direction, but given inevitable future Technology Developments
uncertainties, the approach to fulfilling the vision needs to encourage agility and adaptability.
In an interactive workshop, the committee conducted a visioning exercise and developed many visual representations Future Finance Vision and
of the future finance function. Two examples of these have been included below. They illustrate the journey of Development Roadmap
the profession to continue delivering value to internal and external stakeholders, enabled by technology, and with
finance professionals as the octopus or nerve system, connecting the organization to ensure a collaborative and The Finance Professional
integrated view. Profile of the Future
Key Skills Needed for

Technology Competence
The Accountant Role in

Effective Risk Management
Audit Quality and Audit

Professional Ethics
IFAC’s Approach to
Business
DATA
CHAMPION
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Section I: Developing a Vision for the Finance
The Customer Perspective
Function Building Awareness of
1. The Customer Perspective of the Finance Function: Opportunities and Challenges the Latest in Digital and
A session focused on understanding the external customer perception and expectations of the finance function
around the world. Three key components include: Future Finance Vision and
• A view from Zaiton Mohd Hassan, Audit Committee Chair, Sime Darby Development Roadmap
• An interactive session to define perceptions and expectations from the vantage point of various customers of the
finance function. The Finance Professional
Profile of the Future
• A public sector perspective from three members experienced in finance leadership in the public sector–
Janet Senior, Executive Director for Resources and Regeneration (and currently interim Chief Executive), London Key Skills Needed for
Borough of Lewisham, UK Technology Competence
Joyce Evans, Deputy City Treasurer/Director of Revenue, City of Kitchener, Canada

Larry White, Executive director of the Resource Consumption Accounting Institute and former commanding Effective Risk Management
officer of the US Coast Guard Finance Center), US
2. Building Awareness of the Latest in Digital and Technology Developments Audit Quality and Audit
To understand the latest in digital and technology, two experts discussed the impact of technology trends on the
finance function, with a particular focus on the transformation of finance service delivery and people models, and
the potential emerging role of the finance leader around technology innovation: Professional Ethics
• Jeanne Boillet, Global Assurance Innovation Leader, EY on key enablers for an agile finance function IFAC’s Approach to
• Sam Peterson, Partner/Principal, Blockchain Leader, Americas FAAS Digital & Analytics, EY on blockchain and its Professional Accountants in
Business
use cases
3. Future Finance Vision and Development Roadmap
A creative session to develop a vision and roadmap for the finance function in the context of business needs,
expectations of the customers of finance, and technology and other trends impacting finance and accounting. The
session had two key components:
• David Anderson, Digital Finance Experiential Lab, Deloitte MCS Limited, discussing how well finance functions are
meeting current business needs, what needs to occur for the finance function role to materially change, and what
a typical finance function development plan involves.
• Paul Urquhart, Deputy CFO, Australia Post, highlighting the development of the finance function vision within his
organization, and an interactive and session to develop ideas for generating a finance function roadmap.
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4. The Finance Professional Profile of the Future The Customer Perspective
Building on work done in 2017 (see Developing a Future-Ready Profession), this session focused on building thought Opportunities and Challenges
leadership on the future profile of the finance professional based in eight different roles that demonstrate how
finance professionals need to adapt to be integral to the business. Interactive group work to identify the skills and Building Awareness of
competencies needed to embrace these roles will be the basis to influence a future finance function vision and
transformed service delivery model.
5. Key Skills Needed for Technology Competence Future Finance Vision and
Development Roadmap
Anne Marie Vitale, Partner, PwC, Deputy Chair, International Accounting Education Standards Board (IAESB), and
Chair of IAESB ICT Task Force shared an overview of the work of the IAESB, which is considering how emerging
technologies are impacting the technology and communication skills professional accountants need to perform The Finance Professional
their roles effectively. Accounting education for both current and aspiring accountants needs to keep pace with the Profile of the Future
changes in technology, the challenge being the necessity to look forward to be proactive and not reactive.
Section II: Update on Current Initiatives The Accountant Role in


6. The Accountant Role in Effective Risk Management
7. Audit Quality and Audit Committee Effectiveness
8. Professional Ethics Professional Ethics
9. IFAC’s Approach to Professional Accountants in Business IFAC’s Approach to

Business
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Special Workshop on Effective Meeting Design and Facilitation of the Finance Function:
Immediately prior to the PAIB Committee meeting, an inaugural
IFAC PAIB workshop for PAOs on designing and facilitating Building Awareness of
participatory workshops provided an opportunity to reflect the Latest in Digital and
on how to enhance meetings and events. This special training Technology Developments
session provided insights on facilitating interactive workshops
and events which have been used by the PAIB Committee in Future Finance Vision and
recent years. Development Roadmap
As the world becomes more complex and new challenges arise,

a PAO’s ability to gather insights and perspectives from key The Finance Professional
stakeholders and turn this into strategy and actions is becoming
critically important in helping a PAO become more connected
and adaptable. Key Skills Needed for
Sixteen PAOs participated including guest PAOs from Haiti, Ecuador, Kenya, South Africa and Suriname.
Their involvement in the subsequent PAIB Committee meeting enriched the meeting discussions and
provided new perspectives. The Accountant Role in

Professional Ethics
Business
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Section I: Developing a Vision for the Finance
Function Building Awareness of
1. The Customer Perspective of the Finance Function: Opportunities the Latest in Digital and
and Challenges
Objective: To understand the external customer perception and expectation of the Development Roadmap
finance and accounting function around the world.
Zaiton Mohd Hassan, Audit Committee Chair, Sime Darby The Finance Professional
Sime Darby is the largest conglomerate company in Malaysia with a market Profile of the Future
capitalization of USD 15 billion and four major businesses – plantation, property,
trading (motor and industrial equipment) and logistics. It is the first PLC in Malaysia to Key Skills Needed for
migrate to integrated reporting. Zaiton provided a view on the expectation of the CFO Technology Competence
from the perspectives of Sime Darby and the Malaysian Institute of Accountants.
Evolving Role and Expectations on the Chief Financial Officer (CFO) The Accountant Role in
• Delivers trust – Through their professionalism and work. The traditional CFO role
of ensuring confidence in the financials remains a given. The need for accounting
and financial expertise will not go away as the CFO role evolves but their stewardship role is being enabled by
technology which improves speed (e.g. accounts closing), accuracy, and reporting at the same time as reducing
cost.
Professional Ethics
• Communicates effectively – The financial statements provide an indication of performance at a point in
time. The CFO needs the ability to communicate, articulate and explain what the financials mean in a way that IFAC’s Approach to
non-accountants can understand. For example, the impact of recent changes to standards covering financial Professional Accountants in
instruments, revenue recognition and leases need to be understood and explained to the board, management and Business
other parts of the business.
• Meets customer expectations – Although CFOs are responsible and trusted to manage all financial aspects of
the organization, they are ultimately judged by peers on what value they bring more broadly to their organization
and whether they are meeting the expectations of various internal and external customers, including: The
governing board, Management and operations, Major shareholders and other funders, Fund managers and
analysts, and Regulators and rating agencies.
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• Secures respect of the board – In relation to the board, the CFO is seen as the trusted professional who is The Customer Perspective
the conscience of the organization ensuring integrity, accountability and trust. When things go wrong, a board
will typically look to the CFO – a heavy load on their shoulders but shows a lot of respect for the accountancy
profession. The board expects the CFO to be a strong communicator explaining the performance of an Building Awareness of
organization in an understandable way, as well as taking an independent objective view (“the sanity test”) on the Latest in Digital and
significant new investments, mergers and acquisition and joint ventures. Technology Developments
• Understands the business model – In relation to management and operations, the CFO needs to understand
the business model to be an effective business partner, and providing insights on financial and risk implications of Development Roadmap
decisions and their potential implications in the short and long term. In terms of ensuring control, the CFO needs
to institute effective checks and balances involving adherence to limits of authority.
The Finance Professional
• Creates long term value – The adoption of integrated reporting and the integrated thinking in Sime Darby Profile of the Future
has brought about a shared purpose and better understanding of what drives value, and brought into view
opportunities and risks that might not be easily quantified in the short term but might have a huge impact
on value creation in the long-term. Sime Darby’s integrated reporting catalyzes forward-looking discussion Technology Competence
with stakeholders rather than a dialogue based solely on past performance. The CFO is expected to be able to
communicate all key aspects of value creation in the integrated report.
Given trust and confidence in an organization is very much based on having a competent finance leader and finance Effective Risk Management
function, from Zaiton’s independent board directors’ perspective, the expectation should be that the CFO is a
professionally qualified accountant.
Professional Ethics
Business
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How do different customers perceive the finance and accounting function in the public and private The Customer Perspective
sectors?
In developing a vision and roadmap of the finance function, it is critical to understand what customers of the finance
function demand from it. Building Awareness of
What do finance function customers want from the finance function?
By Customer Group: Future Finance Vision and
Development Roadmap

Independent Director Regulators
• Leads a finance function that can be trusted
• Holds the business to account and ensures
to deliver effective and efficient finance Marketing Key Skills Needed for
controls and processes • Communicates in the language of the business Technology Competence
operations (so to avoid over reliance on
• Understands the business • Allows for greater dialogue on new ideas and
external audit)
• Understands technology to take advantage of highlights both opportunities and risks
• Provides high quality reporting across
digital enablement • Provides guidance on evaluating marketing
companies that is consistent, complete and The Accountant Role in
• Understands and communicates the implica- ROI and measuring performance of brand
timely Effective Risk Management
tions in changes in financial reporting standards investment
• Ensures no lapses in regulatory compliance
• Reports with transparency on the business • Delivers useful data to support marketing
• Provides confidence in non-financial as well
and relevant data decisions
as financial data Audit Quality and Audit
• Ensures funding is available for strategic and • Links marketing budgets and expenditure to
• Invests appropriately
operational investments and that the investment Committee Effectiveness
• Understands whether business and public specific marketing activity
process is judicious and supports objectives • Collaborates on communication with external
interest outcomes have been delivered
• Communicates effectively to external stake- stakeholders
holders Professional Ethics
Business
Tech (IT, CIO, CTO)
Sales • Understands the operational side of the
Operations business and underlying processes
• Understands the industry
• Holds deep awareness of operational • Views the organization beyond financial
• Explores strategic opportunities to drive
objectives and performance systems and processes
top-line growth (not just focus on cost control)
• Views value stream processes and • Productively invests in new technology to
• Delivers insight into customers that can
systems end-to-end support the business and the finance function
improve proposals and value proposition
• Provides insights that lead to solutions to • Provides connectivity to the objectives and
• Provides market intelligence enabling better
operational challenges strategies of the organization rather than
sourcing decisions
• Inquisitive yet enabling and opportunities being procedural
• Develops responsive and timely performance
focused information that is accessible to sales staff
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Key Insights on Opportunities and Challenges for Finance Professionals in the Public Sector The Customer Perspective
Janet Senior, Executive Director for Resources and Regeneration (and currently interim Chief Executive), London Opportunities and Challenges
Borough of Lewisham, UK
Joyce Evans, Deputy City Treasurer/Director of Revenue, City of Kitchener, Canada the Latest in Digital and
Larry White, Executive director of the Resource Consumption Accounting Institute and former commanding officer
of the US Coast Guard Finance Center), US
Summary of Key Insights Development Roadmap
The Committee discussed the opportunities and challenges facing public sector finance professionals and teams in
the context of significant austerity, revenue limitations, and rapidly increasing demand for high quality services. The Finance Professional
• The importance of effective resource allocation, relevant data and insights, and communication to senior policy
makers, politicians, and the public are all key features of a relevant finance function, and are critical to fighting
corruption, waste, and abuse in government. Key Skills Needed for
• The capabilities and skills required of finance professionals and teams in the public sector is generally more the
same than different than in the private sector but the objectives, political context and constraints are more diverse.
• The challenges faced by finance professionals and teams varies markedly across jurisdictions. In local governments Effective Risk Management
in the UK and Canada, they are on a journey to move beyond their traditional role of ensuring transparency and
accountability in financial management to supporting the effectiveness and efficiency of service delivery using Audit Quality and Audit
innovative approaches. Austerity has led to more expectation on finance teams to help to enhance services in the Committee Effectiveness
context of reducing revenues
• To take a broader role in measuring and managing social value contribution and the resources required to support Professional Ethics
service delivery, finance teams will need to be more engaged in the wider organization enabling them to provide
more relevant data and insights to improve decision making. IFAC’s Approach to
• In some jurisdictions, the professionalization of finance in the public sector remains a consuming priority, and the Business
focus is on providing confidence in accounting and financial reporting, adopting accrual accounting standards
and ensuring an unqualified audit opinion. This pressure to focus on basic financial accounting and reporting
constrains professional accountants from developing the internal decision support information required by other
parts of the organization to improve service delivery, managing operations.
• In government, having an impact on decision making requires involvement in policy making, planning, budgeting,
and program management. Professional accountants are on a journey to be more active in these areas to impact
the future direction of their governments and provide solid financial data and information as the basis for decision
making. A broader set of professional capabilities and skills is needed to transition into valued business partnership
and moving from historical reporting to forward looking decision support.
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The CFO and Finance Professionals, a UK Local Government Perspective – Balancing increasing The Customer Perspective
expectation on service delivery with significant austerity of the Finance Function:
UK Local Government Context
• Local Government is 25% of the total public sector in the UK. Building Awareness of
• For all top tier local authorities the scale and impact of government funding reductions have Technology Developments
been unprecedented since 2010 as a result of austerity policy.
○○49.1% real terms reduction in government funding Future Finance Vision and
Development Roadmap
○○28.6% real terms reduction in spending power (government funding plus council tax)
UK GOVERNMENT FUNDING FOR LOCAL AUTHORITIES The Finance Professional
London Councils – analysis of London Borough funding* reductions of 63% from 2010 to 2020
* formula grant to 2013/14 and then settlement funding (grants and business rates)
• These reductions have necessitated significant Profile of the Future
financial savings to be made putting strain on
local authorities and tax payers. Key Skills Needed for
• Other pressures include: Brexit uncertainties Technology Competence
(impact on growth and access to skills),
inflationary pressures on wages and services; The Accountant Role in
welfare reforms and a broken housing market, Effective Risk Management
increasing demand for services as a result of
population increases. Audit Quality and Audit
Explosive demand growth

Professional Ethics
• Response strategies
• Xx IFAC’s Approach to
○○Reducing costs in a way that does not prevent Professional Accountants in
ability to deliver social value and using reserves Business
in the short term to enable transition • Xx
○○Transformation through innovation - doing

things differently and doing different things • Xx
e.g., demand management; strategic
commissioning paying on outcomes that • xx
incentivize prevention; greater efficiencies
at scale: shared services between councils &
agencies; pooling of different agencies budgets;
new trading operations and raising fees and
charges; more commercial approach to asset
management; greater digitization of services
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The Role of the CFO and Finance Function The Customer Perspective
• The CFO and finance professionals need to understand the demands and expectations, and balance financial Opportunities and Challenges
pressures across the ambitions and responsibilities of the local authority
• Public sector finance teams typically require similar capabilities and skills as those in the private sector but have to the Latest in Digital and
work in a unique context involving Technology Developments
○○Obligations, through statute and regulations, to deliver services. No choice in which services or customers’ needs
have to be met (unlike the private sector where there is flexibility to engage in chosen markets or with certain Development Roadmap
customers)
○○Service delivery being the common “currency” and financial work as the means to the service outcome The Finance Professional
○○Social value the primary concern in all activities to ensure fairness and equality in service delivery (in the private Profile of the Future
sector social value is more often a consideration to support longer term sustainability and corporate resilience)
• UK Local Government – legal framework for finance professionals. The CFO Key Skills Needed for
○○is a key member of the leadership team (HM Treasury ‘Managing Public Money’ 2007)
○○actively involved in all material business decisions (Local Government Act 2000) The Accountant Role in
○○lead on the promotion of and delivery by the whole organization of good financial management (Local
Government Act 2003 & CIPFA Prudential Code)
○○lead and direct a finance function that is resourced and fit for purpose (Accounts and Audit Regulations 2015) Committee Effectiveness
○○must be professionally qualified and suitably experienced (s113 of the Local Government Fin. Act 1988) (Source:
CIPFA Role of the Chief Finance Officer (CFO) in Local Government 2016) Professional Ethics
• The capabilities and skills required of a finance professional in UK local government - from student to CFO
○○Be principled and act with integrity Professional Accountants in
Business
○○Ensure fundamentals of financial management are sound
○○Engage with the whole organization
○○Provide leadership
○○Embrace and use the potential of technology
○○Understand the business to convert data into information / intelligence
○○Able to partner and work with others – commercially and in alliance
○○Agile and open to change
○○Prepared to challenge
○○Be risk aware
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Canada - Opportunities and Challenges for Municipal Government The Customer Perspective
Strategic context for municipalities Opportunities and Challenges
• Open government - transparent and accountable to citizens, providing easy access to Building Awareness of
information, a great customer service experience, and meaningful opportunities to participate the Latest in Digital and
in the democratic process. Technology Developments
• Strong and resilient economy - within a collaborative network of city-builders to create a
dynamic and prosperous local economy that is rich with employment opportunities and
Development Roadmap
successful business ventures that can grow and thrive within the broader global economy.
• Safe & Thriving Neighbourhoods - connected, safe and walkable neighbourhoods with a range of housing options. The Finance Professional
• Sustainable Environment & Infrastructure - well planned, managed and cost effective infrastructure systems that Profile of the Future
support long-term community needs for services, harnessing the benefits of nature through green infrastructure
programs to create a healthy urban environment. Key Skills Needed for
• Effective & Efficient City Services - delivery of quality public services that meet the day-to-day needs of the
community in a reliable and affordable way, made possible through technology, innovation, employee
engagement and a sound long-term financial plan. The Accountant Role in
• Government policy and legislative frameworks and requirements that determine service delivery priorities, prohibit
budget deficits, and limit revenue, borrowing and investment options.
Financial Challenges Committee Effectiveness
• Balanced budgets are legislated by the Province and budget increases are typically held below inflation
Professional Ethics
• Growing cities through new development and increasing demand for services
• Municipal costs increases more than inflation causing pressures e.g. increasing salaries IFAC’s Approach to
• Limited sources of new revenues and need for investment to replace aging infrastructure Business
• Increasing legislation in areas such as water quality; minimum wage; accessibility; health and safety
Tools to address challenges
• Replace aging IT Systems with integrated systems
• Mobile computing for technicians and 24/7 self-serve access for customers for a variety of services
• Lean management process reviews and implementation, and reorganize work flows for greater efficiency
Next Steps
Customer perception of CFOs and finance functions will be further explored in a series of round tables aligned to the
next PAIB Committee meeting agenda.
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2. Building Awareness of the Latest in Digital and Technology of the Finance Function:
Objective: To understand latest digital and technology developments and their impact on the effectiveness and Opportunities and Challenges
efficiency of finance functions.
The session built on previous committee discussions around the impact of digital and technology trends, with a the Latest in Digital and
particular focus on the transformation of finance service delivery and people models, and the emerging role of the Technology Developments
finance leader around technology innovation.
Presentation from Jeanne Boillet, Global Assurance Innovation Leader, EY Development Roadmap
To survive in the new normal, finance functions need to adapt to the challenges and opportunities (and potentially
disruption) introduced by digital technologies and new operating models. The Finance Professional
Key Trends Impacting the Finance function
TREND IMPACT
The Modern CFOs are increasingly driving strategy Requires faster and better information outside Technology Competence
changing and business model innovation, ensuring the the traditional constraints of time and cost,
role of the organization stays ahead of business cycles. underpinned by enhanced business partnering
CFO capabilities.
Accelerated Organizations are adopting rolling budget/ Requires finance to look outside the
planning forecast cycles, some moving to continuous organization to understand major trends and to
cycles forecasting and real-time information delivery. identify patterns, critical risks and opportunities. Committee Effectiveness
Demand for Users are demanding access to ever-increasing Requires finance to move through and analyze Professional Ethics
advanced amounts of data. vast amounts of information, deliver more
analytics tailored role specific reporting and drive new IFAC’s Approach to
insights and better decisions. Business
New Intelligent automation technologies, advanced Offers unparalleled change opportunities for
technologies real time analytics, in-memory computing and finance.
blockchain
Agile Finance
Is digital leading to a better finance world? Digitalization is impacting the role of the CFO and finance leaders by
enabling an agile finance function that is:
• Responsive – to changing market dynamics, business needs and regulatory requirements
• Insightful – providing accurate, timely and actionable information to stakeholders
• Efficient – delivering quality service at a competitive cost, while being flexible to demand
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Five challenges that can impact the finance function The Customer Perspective
1. Does digital lead to new value? Opportunities and Challenges
Yes, it does. It enables a better understanding of complex correlations, transforming data into insights, and insights Building Awareness of
into value. the Latest in Digital and
2. If digital finance changes everything, how do we enable our people?
Specialized training is key, as well as the reorganization of current operating models to assign the right skills to the Future Finance Vision and
right positions Development Roadmap
3. Do we still need local finance if global transparency is possible?
Global finance offers consistent data models and real time information through automated processes in lower cost Profile of the Future
locations, which challenges local information advantages.
4. Does digital lead to empty offices? Key Skills Needed for
There will be major impact in most workplaces, with employee reductions of 50% expected within the next 5-10 Technology Competence
years. As a result, employees need to adapt to new skill requirements.
5. Timing and value – identifying sustainable solutions and optimizing investment in new technology The Accountant Role in
It is important to focus on technology that can solve complex business issues, differentiating sustainable solutions
from temporary hypes. Avoiding early adoption by piloting new technology before making a final investment
decision is essential. Committee Effectiveness
Key Enablers for an Agile Finance Function
• Talent management and organization design – Equipping current and next generation finance leaders with Professional Ethics
the skills and capabilities to excel in an agile, digital future is crucial. Finance must also organize its resources more
effectively to deliver business needs. One way to do this is through a Global Business Service (GBS) model.
• Next generation enterprise resource planning (ERP) – Traditional ERP applications, while extremely powerful, Business
are not flexible and functional enough to enable agile finance. Next generation ERPs change this. They can store
and process large volumes of data in ways that they could not in the past, support advanced analytics, reduce
the number of system interfaces and enhance reporting capabilities. An example of a next-generation ERP is SAP
HANA.
• Big data and advanced analytics – Most companies already use descriptive analytics, which involves mining past
data to report and understand what has already happened. Predictive analytics is the next step, which leverages
past data to understand underlying relationships and predict future outcomes across various scenarios. Prescriptive
analytics is the most advanced type of analytics, which uses simulations to determine which decision or action will
produce the most effective result against a specific set of objectives and constraints.
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• Internet of Things (IoT) – IoT enables massive flow of real time data into financial systems by connecting devices The Customer Perspective
onto a network. In implementing IoT, there are issues that CFOs need to consider, such as security implications
and tax ramifications. IoT can add value to traditional products, but could also make product companies seem
more like service providers. Building Awareness of
• Cloud and software-as-a-service (SaaS) – New cloud-based billing systems and reconciliation and reporting
platforms can further improve finance’s capabilities. New ERP solutions are available in cloud form and have a
number benefits including: reduced cost; robust security tools; and opportunities to drive standardization in a
faster, smarter way. Development Roadmap
• Blockchain and distributed ledgers (see Blockchain section)
• Intelligent automation (Robotic Process Automation (RPA), machine learning and artificial intelligence) The Finance Professional

Automation gaining momentum The Accountant Role in

Automation has various maturity levels. RPA has the lowest entry cost and is helping to transform repetitive,
rules-based and high volume activities. It involves screen-level data collection, workflow and process automation
based on existing systems. With greater cognitive capability and server-based approaches, automation can Audit Quality and Audit
extend to managing unstructured data through machine learning & natural language processing, which involves Committee Effectiveness
reading source data, pattern recognition, and self-learning capabilities leading to more predictive capability.
Robotic Process Automation in finance and accounting – an Update from Rick Payne, ICAEW Finance Direction Professional Ethics
Programme, and Jamie Lyon, ACCA
Learning points Professional Accountants in
Business
• RPA does not solve failing processes. Process simplification and optimization remain critical, and change
management needs to deal with resistance to change and challenges with legacy IT systems.
• Requires clear direction on tasks you automate, and those you don’t.
• Build RPA skills in the team. The right skills are needed to develop automation scripts, but this does not require
deep technical programming expertise.
• In assessing benefits, cost reduction is only one measure; benefits of releasing time for finance staff is key.
• RPA needs to be part of a wider digital finance function vision that can be scaled and clearly connects to other
technologies and applications.
• Effective engagement with IT and outsourcing and BPO providers is important.
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What can we do now? The Customer Perspective
• Look for ‘quick win’ efficiencies in the way processes are performed Opportunities and Challenges
• Refresh the team’s profile – need people who understand the opportunities and risks from digital Building Awareness of
• Recruit team members who are interested in doing things differently the Latest in Digital and
• Hire and train good project managers
Development Roadmap




Professional Ethics
Business
Source: EY
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Sam Peterson, Partner/Principal, Blockchain Leader, Americas FAAS Digital & Analytics, EY The Customer Perspective
What is Blockchain? Opportunities and Challenges
• Blockchain is software, both a database and a network. It is a distributed ledger with no central authority (i.e. no Building Awareness of
single participant controls the blockchain) that keeps a record of each transaction that occurs across a network. All the Latest in Digital and
transactions are secured by encryption to prevent tampering. Technology Developments
• A transaction and record occur in one single event with automated validation of a record in a “block”. This
validation happens through a consensus algorithm (also referred to as a consensus protocol), which is an
Development Roadmap
important mechanism to ensure data being added is properly validated. The type of consensus algorithm to use is
a key decision when setting up a blockchain. They can be very complex and require high computing power, which
in turn consumes vast amounts of electricity. There are also less complex methods that use less power, but will The Finance Professional
impact on the speed of processing. Profile of the Future
• Chained blocks form a ledger and each computer participating in the chain has access (via a key) to the complete
ledger.
• Blockchains can contain smart contracts, which are a type of automation that attach a set of rules to a transaction
through small programs that govern when and how transactions are processed. These could be legal agreements, The Accountant Role in
but could also be other business processes. Effective Risk Management
Uses for Blockchain
Blockchain is increasingly being applied to supply chain management and operational processes, for example to Audit Quality and Audit
verify the origin of food.
Other uses include:
Professional Ethics
• Health care – records management and procedure billing and ordering Wine Blockchain
The wine industry faces the issue of IFAC’s Approach to
• Media – verifying intellectual property Professional Accountants in
counterfeiting, with 20% of Italian
• Manufacturing, power and utilities – cross-border trade and logistics wine estimated to be counterfeit. Business
• Public Sector – Voting and public registries This video outlines how Blockchain
• Financial Services – Cross-border payments and securities and has been used by wine producers to
derivative clearing and settlement verify authenticity.
EY is involved in developing proof of concepts and use cases in various
settings including supply chain (wine) and financial services covering intercompany transactions, and financial and
commodity markets where potential savings in market activities range from 30-60 per cent by reducing capital costs
through faster settlements, reducing technology costs by removing dependency on multiple systems, and taking out
manual processes.
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Development Roadmap


Source: EY
Where can blockchain be useful?
• The core problem blockchain solves is data fragmentation. Data fragmentation is most complex when it takes Audit Quality and Audit
place between organizations (e.g. intercompany transactions). Committee Effectiveness
• In cases where multiple parties are writing to a database, blockchain eliminates the need to reconcile data.
Therefore, data becomes much more reliable. Professional Ethics
• Blockchain provides a complete audit trail from whenever the chain was set up. Everyone has IDs (public and IFAC’s Approach to
private keys with a unique number) and can see who accesses the information and at what time. Professional Accountants in
Business
• When a big system is coming to the end of its useful life, it is a good opportunity to consider blockchain.
Blockchain has a wide range of applications and the more complex the situation, the more valuable blockchain will
be. However, there are certain situations when it is not an appropriate solution to a business problem.
EY uses a five-point test:
1. Are there multiple parties in this ecosystem?
2. Is establishing trust between all of the parties an issue?
3. Is it critical to have a tamper-proof permanent record of transactions?
4. Are we securing the ownership or management of a finite resource?
5. Does this ecosystem benefit from improved transparency?
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Challenges to Blockchain Scalability The Customer Perspective
• Legal and regulatory concerns – Current laws do not cover distributed ledger technologies, which raises Opportunities and Challenges
questions such as: How will system failures be addressed? Who has legal claim to all or parts of the data?
• Security concerns – There have not yet been hacks on the underlying blockchain software itself, but the smart the Latest in Digital and
contracts that enable automated transactions to a blockchain can be exploited if badly coded. Blockchain will not Technology Developments
solve bad coding or sub-optimal processes.
• Data privacy concerns – Data can be stored indefinitely, which raises concern over compliance with data
Development Roadmap
protection regulations.
• Scalability concerns – Blockchains consume massive amounts of electricity, which raises concern over its The Finance Professional
scalability, as well as its environmental impacts. Profile of the Future
• Uncertainty around the cost of implementation – Need to consider ongoing hosting fees and support costs.
• Loss of keys – Private keys are important to control the data, loss of that key means loss of control of the data. Key Skills Needed for
Companies across the world are currently experimenting with blockchain to overcome these challenges. Over the
next three years, huge growth is expected in its application across industries.
Useful Resources Effective Risk Management

Professional Ethics
Business
EY report: Blockchain, How ACCA report: The race for IFAC: Blockchain: Impact on business, Finance,
This Technology Could Im- relevance Technology op- and Accounting, available to IFAC member
pact the CFO portunities for the finance
organizations to share and/or customize. Please
function
contact stathisgould@ifac.org to request use.
Action for PAOs

• Review what is needed to raise awareness and build the capacity of your members around blockchain. The
key question to address is what needs to be done today to position accountants in business for success in
improving finance and business processes using distributed ledgers. New skills are needed but an experiential
learning mindset and culture within finance teams will be paramount.
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3. Future Finance Vision and Development Roadmap of the Finance Function:
Objective: Develop a vision and roadmap for the finance function in the context of evolving Opportunities and Challenges
business needs, expectations of its customers, technology, and other trends impacting finance and accounting. Building Awareness of
David Anderson, Digital Finance Experiential Lab, Deloitte MCS Limited Technology Developments
Finance Function of the Future, Vision and Development Roadmap
Where are CFOs and Finance Functions Spending their Time? Development Roadmap
CFOs and their finance functions are generally struggling to meet business needs. Based on Deloitte research
involving 290 CFOs over a 6 year period, today finance is spending around 56 percent of its time on steward and The Finance Professional
operator roles as compared to strategist and catalyst roles that focus on proactive and predictive activities to: Profile of the Future
• Guide and steer the business to make the right strategic choices in response to increased uncertainty; and
• Focus on partnering the business and providing the insights to drive commercial outcomes in the key moments Technology Competence
that matter.
The 2025 vision for CFOs and their finance functions is to be able to spend more time on strategic and business The Accountant Role in
partner roles enabled by. Effective Risk Management
• Automation and the adoption of distributed ledgers (blockchain) to streamline transaction processing and
allow previously manual transaction processing to be touchless. These developments are likely to significantly Audit Quality and Audit
reduce headcount in certain traditional areas of finance and allow greater focus on higher value activities. Many Committee Effectiveness
larger organizations are targeting a total finance operations cost of 0.5 per cent or less of total entity revenue.
• Data volume and analytics will transform business finance, providing an opportunity to greatly enhance its Professional Ethics
service to the business by providing insights that are needed to support value creation. As business partnering
increases and becomes more embedded into business lines, the boundary between the finance function and the IFAC’s Approach to
organization will increasingly blur. Business
• Real time and self-service reporting transforms how finance and accounting information is delivered. Real
time and periodic reporting is no longer needed to service operational decision making. The shift to self-service
reporting is accelerating and is increasingly delivered via app-based solutions to support management and
operational decision making.
• New service delivery models emerge for operational, business, and specialized finance. Work is completed by
a combination of humans, robots, and algorithms. Companies will need to rethink their offshore operations and
outsourcing models.
• Data standardization and governance become key focus areas. Public & private Application Programming
Interfaces (APIs) will help drive data standardization, but data cleansing, governance, and analytics will be key
focus areas. The use of apps for different purposes is prevalent in all aspects of life and will be a central feature of
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information delivery in organizations. Finance applications and microservices will increasingly challenge traditional The Customer Perspective
ERP services and the big vendors will evolve their own service delivery in support of ERP platforms.
The Best Way to Predict the Future is to Create it
Finance function development plans need to be adaptive and specific to industry and organization environments. the Latest in Digital and
The approach to developing a vision for the finance function must be adaptable and iterative in exploring alternative Technology Developments
ways of fulfilling a vision, with customer and business needs being at the core.
There can be no fixed end state given the abundance of change and uncertainty, but there is a need for a “north
Development Roadmap
star” and a development approach that encourages agility and adaptability and learning through doing. The future
is so uncertain that looking too far ahead is unhelpful.
The Deloitte approach to finance function development provides a journey of exploration of digital trends, change Profile of the Future
drivers and good practice signals.
The key elements of a development plan include Key Skills Needed for
• A vision to help deal with and respond to uncertainty and acknowledging that the end state is unknown
• Placing (organizational) strategy, customer needs and
experience at the heart of design. Looking at the needs Effective Risk Management
of (internal) customers of finance provides a limited view
of where to make enhancements. Looking at the client
perspective makes it possible to enhance processes and service Audit Quality and Audit
delivery end-to-end
• Crowd-sourcing, virtual workshops and digital demos to
Professional Ethics
incentivize ideation and aid delivery. Crowd sourcing ideas
involving those from outside of the finance function aids IFAC’s Approach to
experimentation and ideas implementation Professional Accountants in
Business
• Live exploration of digital technologies and ways of working
• Rapid proto-typing, experimentation and timely acceptance of
failing and need for continual reiteration
• Ability to quickly scale areas of good practice.
A finance development plan can be in the context of three key dimensions:
• Worker – roles, talent, knowledge and skills required
• Work – the type of work finance professionals will be doing in the future
• Workplace – the structures and practices to enable the worker to create value in the future.
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Paul Urquhart, Deputy CFO, Australia Post, provided an example of the type of factors that are being considered in of the Finance Function:
his organization as part of developing a finance function vision of the future.
IOT
IN-MEMORY LIVE DISTRIBUTED

2014
COMPUTING LEDGER
Development Roadmap
“Cloud LIFE LONG
G GIG ECONOMY
G
computing” is LEARNINGG
adopted
amongst
1963 2009 SMEs
Position of 1981
1946
First
CFO
introduced
IBM released
the first PC
1987
Spreadsheets
are widely 1999
Blockchain
is developed
2014
The rise of Robot
Processing
CLOUD
DIVERSITY &
SMART
ROBOTICS
computer adopted ERP systems 2014 Automation HEALTH & INCLUSION
developed become widely NG
WELLBEING
adopted Visualisation
Tools are
1975 1987
more widely
1963 2008 adopted
Forecasting TurboCash
Robert CFO role shifts
techniques released POWER TO
McNamara
became widely 1991 from core finance
establishes an accounting function to PULL TEXT TO PICTURES TO
used Internet COGNITIVE

1931 early software strategy driven VOICE
released for COMPUTING
approach to system role2
Development of public use
Electronic planning and
analyser budgeting
differential
ADVANCED ANALYTICS
INTERNET OF THINGS MEANS ADVANCED ANALYTICS FOR

MORE DATA VALUE
Facilities, retail outlets, trucks, vans and bikes will be fitted The volume of IOT data from embedded sensors will increase,
with sensors that capture event and environmental data.
Converged with other datasets, AP will use this new data to
derive value within our business from advanced analytics
as too will the utilisation of external crowdsourced data being
user for strategic forecasting obtained from open source
platforms. This data will evolve Advanced Analytics to drive
and create new revenue from commercialisation of this
data.
increased value contribution from Finance; where deriving
value from data and driving disciplined change to business
practices to generate value will form a much larger part of its
The type of work Finance will be
doing in the future
The workforce composition, skills
and capabilities required
The structures and practices to
enable the worker to create value
role.
in the future
LIVE DISTRIBUTED LEDGERS
FOR AR/AP INITIALLY Imagine… Imagine… Imagine…
A live distributed ledger, similar to the blockchain, where COGNITIVE TECHNOLOGIES AUGMENT A SHIFT IN ROLE DIVERSE EDUCATIONS BEYOND COMMERCE BLURRING OF WORK & PERSONAL SPACE
transactions are verified in real time will be used initially for HUMANS Continue to have solid control and governance Education shifts towards digital, engineering,
Roaming, mobile teams that work in a range of
Accounts Payable, Accounts Receivable and Payroll over business commercials, with an increased data science, media and communications physical environments with other parts of the
removing the need for invoices, eventually extending to the Finance will use artificial intelligence and broader datasets to focus on delivering tangible commercial value business
entire ledger. Live distributed ledgers will catch up to the augment their commercial acumen in more complex to the business EXPERIENCE WITH TECHNOLOGY IS CRITICAL
real time digital payments technologies and enable
payment in digital currencies creating a connected
ecosystem that is verified and secure.
decisions. For example unstructured text in social media and
news will be used to value the influence of entrepreneurs in
potential business acquisitions, and capital project status
MORE TECHNOLOGY, LESS EFFORT
Increased experience in working with cognitive
technologies, and code based algorithms across
different platforms
WORKING TOGETHER, RATHER THAN FOR
Flatter organisational structures, with more Committee Effectiveness
Self service reporting, chatbots and predicative peer based workers accountable for clear
updates will identify human traits in leaders and project
artificial intelligence will replace finance outcomes over being managed
managers that will get the best returns from invested capital
processes that were once delegated to finance HIRE FOR APTITUDE OVER EXPERIENCE
based on the type, shape, form of project or investment.
SMART ROBOTICS analysts More advanced problem solving, consulting, TEAMS FORMED, AND REFORMED
change mindsets, and an ability to pick things Nimble culture catering to flexible work
Robotic process automation will increasingly replace EXPLOSION OF DATA ACCESS up quickly with an increased ability to connect arrangements, teams to be set up and
manual human effort to perform transfers, manipulations,
allocations, journals, purchasing and reconciliations. Rather
than investing in more systems or integrating existing CLOUD ENABLED
Access to data will be extensive and in real
time; work will increasingly become self
generated where value is mined from the data
technology and human behaviour
SPEED TO ACTION OVER ACCURACY

disbanded quickly and allowing for contingent
workers Professional Ethics
systems; Finance will evolve to leverage machine learning to based on a deep understanding of the business Workers will demonstrate much faster abilities MENTAL HEALTH A FOCUS
predict and forecast underlying business results and Large enterprise corporates will move away from on premise to learn, understand underlying mechanics of Diversity in workspaces and locations, fostering
contribution with no human intervention. IT architecture leveraging advances in cloud technologies, EXCEPTION BASED EFFORT the business and be more flexible in changes to safety, health and wellbeing with increased
which will facilitate data sharing between functions and pre- their roles
Work will become exception based requiring management of outcomes over activity
cursor the initial moves to a live distributed ledger. Granular
transaction data will move first for both analytics and
increased human investigation shifting away
TEXT TO PICTURES TO VOICE from periodic processes ATTRACTING TALENT WILL BE ABOUT PURPOSE
reporting, but will eventually extend to the entire ERP and GL.
Greater prominence of social consciences with
Reports with tables and graphs, will be replaced with ith
th more emphasis placed on the purpose of work
SHIFT TOWARDS FACILITATING CHANGE
interactive visualisation tools and databots that will
IN-MEMORY COMPUTING TO IMPROVE Finance will shift towards a middle office or a
constantly monitor data in real time and answer
TECH SOLUTIONS performance management role, where efforts
Business
commercial questions on demand via text and voice. Both
are focussed on strategic influence to drive
visualisation tools and databots will be able to alert the
Finance will increasingly leverage in memory computing to disciplined executions and meaningful change
business of events outside expectations. The CFO will
receive summaries questions being asked of databots each facilitate expected response times in crunching so much data that achieve clear commercial outcomes
week or month as potential lead indicators to concerns or that finance will have access to perform advanced analytics,
performance. The technology will progress to making cognitive computing and intelligent robotics. Queries are
recommended actions and predict the change in business processed up to 20,000x faster in real time. This will increase
performance by taking that action. the speed to migrate to cloud based solutions.
An Update on Enterprise Performance Management (EPM)

As set out in the last PAIB report, Professional Accountants as Business Partners and Value
Enablers, the PAIB Committee has been supporting the development of a report to help
prepare professional accountants for a more significant contribution to EPM.
The report on EPM captures how finance professionals and the finance function can ensure
relevance in this space based on four key enablers of an effective finance team contribution to
EPM covering data and models, technology, talent and skills, and culture. It is available here.
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The Finance Function and Talent Management The Customer Perspective
• The success of a finance function development plan is dependent on talent management strategies that capture Opportunities and Challenges
the right roles, people skills and capabilities, and change management that together, with investment in digital
and technology, can bring about a more efficient and effective finance function. Building Awareness of
• A development plan needs to reflect internal constraints for growth in the current finance teams, including culture Technology Developments
and behaviors, structure, and focus on where technology and digital innovation can enable people to deliver in
their roles. In some organizations, finance leaders will need to influence peers to ensure adequate investment in Future Finance Vision and
advancing of finance team development toward a greater contribution to the organization and its goals. Development Roadmap
• Teams will be increasingly multidisciplinary. For example, Deloitte’s Digital Experiential Lab brings together finance
professionals, user experience specialists, software engineers and architects, and data scientists. Organizations The Finance Professional
are also increasingly moving to open and flexible models of engaging talent utilizing joint ventures, contractors, Profile of the Future
freelancers, gig workers and crowd sourcing to facilitate innovation and development.
• Talent management strategies will need to create new personas for finance staff focused on adding value to the Key Skills Needed for
organization such as new business partner roles focused on value creation and provide job specifications for the
roles and capabilities needed to support the delivery of a vision and plan. Equally important will be the need to
shape the more specialist roles in business finance in tax, treasury, financial and regulatory reporting, and those The Accountant Role in
managing transactions and systems (whether in the organization or in outsource providers). For controllers and Effective Risk Management
those in specialist finance roles, technology will also help to more efficiently deliver compliance and regulatory
requirements, and reporting to external stakeholders. Audit Quality and Audit
Implications for the Profession and the Development of Finance Teams
• Becoming a finance professional needs to be seen as a training ground for a business career attracting the right Professional Ethics
talent into the profession.
• A diverse and digitally-enabled finance function will be more exciting to students and youth. The automation of IFAC’s Approach to
transaction processing is seen as an opportunity for finance professionals to undertake more value added roles. A Professional Accountants in
Business
dual focus on technology and people development will allow finance roles to be more rich and rewarding.
• Talent management and learning development strategies need to support the delivery of a finance function
development plan. These will increasingly emphasize problem solving and creative thinking capabilities, flexibility
and adaptability and acquisition of new skills and capabilities.
• In a digitally enabled finance function, finance professionals will face new challenges. For example, where
machines undertake deep learning and analysis using structured and unstructured data, the connections and
insights they provide might not be fully understandable to humans. This will mean that the professional judgment
and skepticism of accountants in business will be increasingly important.
Deloitte has identified digital related capabilities that they have established for effective finance teams in the future,
see Leadership characteristics of ‘digital natives’.
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4. The Finance Professional Profile of the Future of the Finance Function:
Objectives: Develop thought leadership on the future profile of the finance professional; and develop a knowledge, Opportunities and Challenges
skills and competency profile to implement finance function change and support a transformed service delivery
model. the Latest in Digital and
In 2017, the PAIB Committee started creating a vision for the future profile of an accountant in business (see Technology Developments
Developing a Future-Ready Profession). This has led to the creation of eight different roles to capture how finance
professionals will be integral to business, both currently and in the future. Future Finance Vision and
Development Roadmap
• Co-pilot/Navigator – Steering an organization toward achieving its objectives & sustainable value creation, and
enabling integration.
• Brand Protector – Ensuring business integrity and sound reputation through good governance, risk and control, Profile of the Future
effective stakeholder engagement and social license to operate, and financial discipline.
• Trusted Professional – Professionally objective and skeptical, challenging the organization when needed. Key Skills Needed for
• Storyteller – Explaining the organization and how it’s creating value over time to internal and external
stakeholders.
• Influencer – Influencing decisions with robust data and analysis, and driving change and transformation. Effective Risk Management
• Technology and Digital Enabler – Enabling a cognitive and data-driven business that utilizes technology, digital
and automation in ways that drive decisions. Audit Quality and Audit
• Analyst – Providing constructive insight into various aspects of the business model, including on trends,
customers, products and suppliers, critical resources and dependencies, opportunities and risks.
Professional Ethics
• Transaction and Process Expert – Ensuring efficient and effective end-to-end process and work flows in across
finance and the organization. IFAC’s Approach to
Business
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The skills and competencies to support these eight roles were considered by the committee and the results of their The Customer Perspective
discussions are highlighted in the table below.
Transaction/
Co-Pilot/ Technology/ Building Awareness of
Brand Protector Trusted Process Expert
Storyteller Influencer Digital Enabler Analyst the Latest in Digital and
Navigator Professional

Development Roadmap
Knowledge, skills and competencies professional accountants require to embrace these roles The Finance Professional
Business and Sector-Specific Technical Interpersonal & Behavioral
• Knowledge of industry, competitive landscape, • Sufficient level of expertise and competence, • Agility and adaptability: learning and
emerging trends, supply chain and sourcing and necessary qualifications, for the specific experimenting with new ideas and approaches Key Skills Needed for
role, including the fundamental areas of Technology Competence
• Deep understanding of the business in all • Being self-aware of strengths and limitations
finance:
areas of the business model, including external (supported by 360 appraisal and mentoring)
operating environment, strategy, opportunities ○○ Accounting standards, quality standards, The Accountant Role in
• Effective communicator of vision, purpose, big
and risks, drivers of value, and KPIs and of relevant laws, tax and regulations Effective Risk Management
picture, details, and story telling
• A multicapitals perspective on how value is ○○ Management accounting
• Emotional intelligence and empathy
created and destroyed in organizations Audit Quality and Audit
○○ Financial reporting
• Ability to apply professional objectivity and Committee Effectiveness
• Awareness of internal and external customers
○○ Specialist areas including tax, treasury and competence including in uncertain and
and stakeholders and their expectations and
corporate finance ambiguous situations
information needs
Professional Ethics
○○ Governance, risk and control • Integrity and authenticity
• Understanding of process improvement (e.g.,
lean, ISO), the analytical evaluation of business • Understanding of the frameworks, • Creative and critical thinking IFAC’s Approach to
processes and the financial end-to-end process methodologies, technology and applications Professional Accountants in
• Curiosity and passion
of flow of the organization that enhance decision support and external Business
and/or internal audit • Collaboration and relationship building,
negotiation
• Awareness and application of coding and
programming approaches that support • Confidence and persistence
digitization and process automation, and data
• Conflict and tension management
analysis and visualization
• Social and cultural awareness
• Statistical methods and techniques to support
data analytics • Translator between IT and the business
• Application of visuals and presentation

approaches for effective communication
• Understanding of digital risk, data security and

governance
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Ways to Acquire Relevant Knowledge, Skills and Competency The Customer Perspective
Given the half-life of knowledge and a rapidly evolving business ecosystem, the need for lifelong learning and Opportunities and Challenges
continuing professional development is greater than at any time. Significant educational challenges face PAOs
and education providers, organizations and individuals. Traditional learning and education approaches are being Building Awareness of
challenged, and PAOs, organizations and education providers need to rethink their respective roles and relationships.
The balance of learning and education of professional accountants in business is split between formal and structured
education, lifelong learning and social and community based peer-to-peer approaches Future Finance Vision and
Development Roadmap
• Formal and structured
○○Professional qualification from a PAO as basis for relevant professional and technical skills, as well as business The Finance Professional
and commercial knowledge. Profile of the Future
○○Additional education and CPD e.g., executive leadership, technical courses and programs and accreditations,
etc. Key Skills Needed for
• Lifelong learning
○○On the job–opportunity to understand and acquire knowledge about the industry and business through
secondments/job rotation, on-site training and observation, shadowing others. Acquisition and development of Effective Risk Management
relevant skills and behaviors supported by experiential learning, public speaking, team work and collaboration,
and learning by doing in a supportive environment.
○○Specialized training to enable employees to match new digital requirements. Committee Effectiveness
• Social and community
Professional Ethics
○○Mentoring/coaching; use of role models and reverse mentoring.
○○Performance feedback - 360 performance feedback from within and outside the organization. IFAC’s Approach to
○○Volunteer roles (external e.g., board member or treasurer of an external organization). Business
PAIB Committee members also highlighted that upskilling the finance function requires investment. Finance leaders
need to provide a vision and roadmap to influence peers, as well as undertake a skills analysis of the various finance
teams (through skills mapping) to identify future human capital requirements and learning approaches to acquire
necessary skills.
Next Steps
• The Committee’s discussions on the future profile of accountants in business will be further developed and
circulated across the global profession later in 2018.
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5. Key Skills Needed for Technology Competence of the Finance Function:
Emerging technologies are impacting the information and Opportunities and Challenges
communications technology (ICT) skills professional accountants need to
perform their roles effectively. the Latest in Digital and
Accounting education for both current and aspiring accountants needs to Technology Developments
keep pace with the changes in technology.
Anne Marie Vitale, Partner, PwC, Deputy Chair, IAESB, and Chair of IAESB Development Roadmap
ICT Task Force shared an overview of the work of the ICT Task Force.
The ICT Task Force has been gathering evidence on ICT knowledge, skills The Finance Professional
and competencies required by professional accountants in the current Profile of the Future
and rapid changing environment, to evaluate whether the International
Education Standards (IES) are fit for purpose in the digital age. They are Key Skills Needed for
assessing if there is a need for new IES, revisions to existing IES or further Technology Competence
application guidance.
Key points raised include: The Accountant Role in
• Focus is not on the specific technologies or tools, but rather the skillsets
needed to perform in a changing environment, but…
• Future accountants still need an understanding of what is behind the Committee Effectiveness
technology–“What happens in the black box?” Technology does not http://www.ifac.org/publications-resources/infor-
take away the responsibility of the accountant to ensure accurate, mation-and-communications-technology-litera-
Professional Ethics
objective and understandable information is reported. ture-review
• There are actions to take now in order to become ‘digitally fit’. For IFAC’s Approach to
example the use of digital resources such as videos, articles, and apps in order to increase knowledge of newer Professional Accountants in
technologies to professional accountants. Business
• Need to consider at what point to embed technology education – how far does it come into the accounting
curriculum, or do accountants undertake most of their learning through on the job training?
Possibly need a mix of theory and application in accounting education, e.g. integrate use of analytics into the
syllabus, including use of actual software systems.
Next Steps
The PAIB Committee will continue to contribute directly to the work of the IAESB ICT Task Force by providing
insights on the skills and competency required in relation to ICT as well as providing information on how these skills
and competencies are acquired.
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SECTION II: Update on Current Initiatives
6. The Accountant Role in Effective Risk Management
Objective: Support high-quality practices by professional accountants in effective governance, risk management, and the Latest in Digital and
internal control. Technology Developments
An impending report will capture the committee’s recent discussions on effective risk management, highlighting
the critical role of accountants in business. It will also include the feedback from recent PAO workshops with Development Roadmap
young professionals on their perspective on risk management, and the skills and competency needed for career
development. Many accountants in business are involved in risk as it relates to financial reporting and compliance,
but they also need to be able to manage risk more strategically and deal with emerging and wider risk areas. The Finance Professional
The way risk is covered in accounting education can be too narrow. More needs to be done, by both PAOs and
organizations themselves, to build in the competencies needed for effective risk management. These include
analytical, modelling and scenario planning skills, as well as enhancing the necessary interpersonal skills. To meet the Key Skills Needed for
needs of business in risk management, accountants in business need: Technology Competence
• Deep understanding of the business is instrumental in order to gain the credibility needed to challenge how
the organization achieves its objectives. The starting point for effective risk management is a good understanding The Accountant Role in
of how the business creates value, which then provides the context for finance professionals to manage risks
through their core activities.
• Confidence to challenge and ask difficult questions. When something goes wrong, it is often the case Committee Effectiveness
that individuals didn’t feel confident enough to act on existing concerns, only speaking out after the event. The
difficulty for leadership is to create a culture that encourages challenge of contentious issues. Preventative action
can save time, effort and value leakage. Professional Ethics
• Ability to communicate and integrate across boundaries. The boundary of the finance function’s role starts IFAC’s Approach to
to cross over with other functions. The reality is often push back on finance to concentrate on financial control. Professional Accountants in
However, those advanced in risk management appreciate constructive challenge, insightful questions and cross Business
functional communication.
• Models and frameworks. Risk management needs to be built in not bolt on. There is a danger that this is used
as an excuse to do nothing, if risk management is so built in that it’s considered inherent. Therefore models and
frameworks are important. They can be used to frame a conversation, help to ask better questions and ultimately
drive better discussion on risk management to ‘connect the dots’ across the organization. Examples include
the Committee of Sponsoring Organizations of the Treadway Committee (COSO) framework, Enterprise Risk
Management – Integrating Strategy and Performance, and the International Organization for Standardization’s
(ISO) standard, ISO 31000–Risk management. Business model frameworks can also help boards, management and
finance professionals understand all the key elements of a business in order to ask the right questions about risk
and opportunity aligned to value creation.
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• Enhanced quantitative and statistics skills, for example, a good understanding of correlation and confidence The Customer Perspective
limits are an essential requirement.
• Responsiveness to learn from mistakes made within and outside an organization, which can provide a
platform to continually improve risk oversight and management practices. Corporate failures offer learnings in Building Awareness of
potential causes of failure that accountants working in various roles can act upon to prevent similar occurrences in
future, thereby enhancing their professional contribution to stewardship and business partnership.
Next Steps Future Finance Vision and
Development Roadmap
• Develop and circulate a call-to-action to the profession highlighting the critical role of accountants in business in
effective risk management.
Case study: Carillion
A recent example of the consequences of failure to properly manage risk, is the collapse of the UK’s second
largest construction company, Carillion, in January 2018 with debts of approximately £1.5 billion. Such corporate Technology Competence
failures can damage the reputation of the profession. It is therefore important that lessons are learned to prevent
repeat failures and enhance the role of the profession in protecting and creating value.
This is an unfolding story, so there needs to be caution about any conclusions drawn. A range of official Effective Risk Management
inquiries are in progress and it will be some time before the outcomes of these are reported, for example the UK
regulator, the Financial Reporting Council (FRC) is investigating the role of the auditors, as well as that of two of
the recent CFOs. However, at this stage, it appears Committee Effectiveness
• Too many risky projects were taken on at unsustainable margins.
• Aggressive accounting techniques were used to bring forward income and delay payments. Professional Ethics
• Excessive executive remuneration/bonuses were paid alongside continuing dividend payments to shareholders, IFAC’s Approach to
for example, between 2012 and 2016, £376m was paid out in dividends compared to cash generated of Professional Accountants in
£159m. Business
• There was a lack of transparency, for example in its last annual report for 2016 (issued March 2017), Carillion
indicated in its viability statement (part of the UK Corporate Governance Code) that over the chosen period of
its assessment (three years), ‘the directors believe they have a reasonable expectation that the company will be
able to continue in operation and meet its liabilities as they fall due..’
In summary, there was no sudden ‘shock’ or external event that caused the collapse of Carillion, but there does
appear to have been a failure of risk management and internal control. Financial decisions appeared to have
been taken without reference to the underlying fundamentals of the business (i.e. the business model).
The article, Carillion – a salutary reminder on due diligence, reflects, in hindsight, on whether there were
indications in Carillion’s reporting that should have raised alarm of its impending collapse.
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7. Audit Quality and Audit Committee Effectiveness of the Finance Function:
Objective: Improve the financial reporting supply chain through effective audit committees and finance functions Opportunities and Challenges
Responsibilities for an effective audit span across the financial reporting supply chain, and having proper governance Building Awareness of
and oversight arrangements in place in an organization is of great importance to ensure audit quality. A key the Latest in Digital and
component of these arrangements is the role of the audit committee. Technology Developments
The PAIB Committee has been considering the roles and responsibilities of the audit committee; their expanding Future Finance Vision and
remits and resulting impact on their skills, competencies and bandwidth. Development Roadmap
Core responsibilities
Broadly stated, the common core responsibilities of the audit committee are to:
• Oversee the company’s financial reporting and internal control over financial reporting
• Oversee the internal audit function and the external auditors Key Skills Needed for
○○Including scope of work; effectiveness; independence; objectivity; appointment, reappointment and removal;
and approval of non-audit services by the external auditor
• Establish procedures with respect to whistle-blower complaints (often only if delegated by the board) Effective Risk Management
• Review internal control system, risk assessment and risk management (where there is no separate risk committee)
• Engage in self-assessment of its performance or report to the board on how it has discharged its responsibilities. Audit Quality and Audit
Additional responsibilities
An observation shared during the meeting on responsibilities was that if the Board is not directly dealing with a Professional Ethics
matter or there isn’t a separate committee, whatever is left over often falls to the audit committee to oversee.
Business
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An observation shared during the meeting on responsibilities was that if the Board is not directly dealing
with a matter or there isn’t a separate committee, whatever is left over often falls to the audit committee to
oversee.
Additional Additionalidentified
responsibilities responsibilities identified include:
include: The Customer Perspective
Finance function Business processes
Overview of Considering
Appointment Technology Developments
succession scenario Reviewing the
and Assessment analysis, stress
planning for performance of
dismissal of of the CFO testing business Reviewing
the finance material service Future Finance Vision and
the CFO and finance model against level related party
function and pertinent factors transactions Development Roadmap
(jointly with function agreements
internal audit and identifying
the CEO)
department contingency
actions The Finance Professional
Reporting
Monitoring the
Governance management of Reviewing Key Skills Needed for
Reporting on
Oversight of oversight cyber and data strategic and Technology Competence
specific issues
non-financial of manageme governance operational Reviewing bank
considered by
nt’s process processes, risks, business accounts and
reporting and the audit
for preparing health and continuity plans reconciliations
related committee in safety and and procedure The Accountant Role in
and presenting
assurance year and business manuals Effective Risk Management
the integrated
actions taken continuity plans
report

Audit committee effectiveness
With their widening agendas and increasing responsibilities, ensuring the audit committee is fit for purpose is a key Professional Ethics
issue. Worryingly, a recent KPMG global survey of over 800 audit committee members revealed that they are finding
it increasingly difficult, both in terms of time and expertise, to oversee the major risks on their agenda in addition IFAC’s Approach to
to their core oversight responsibilities. It was also concerning that when asked what would most improve their Professional Accountants in
Business
committee’s overall effectiveness, the top response (with 39%) was a ‘better understanding of the business and
risks’, which for an effective audit committee, should already be a core requisite.
The committee discussed other factors that enhance the effectiveness of the audit committee. Key highlights from
the discussion include:
• Composition of the audit committee – Having a professional accountant as audit committee chair can be very
effective as they are often more interactive with the CFO and finance function. But effective audit committees are
not only comprised of professional accountants. Diversity of the committee, including a wide range of expertise is
also very important.
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• Training and support tools – Training programs, guidance and other support tools are essential to ensure the The Customer Perspective
audit committee keep up to date with relevant developments in accounting and corporate reporting, as well as
new technologies and their impact on the business and future of audit (e.g. increased use of data analytics in the
audit process). Suggested approaches to ensure sustained competence of the audit committee include: Building Awareness of
○○Reverse mentoring, where senior members learn from the younger generation, particularly useful to understand
emerging technologies
○○Mandatory training programs for non-executive directors Future Finance Vision and
Development Roadmap
○○PAO resources aimed at executive and non-executive directors, for example CPA Canada’s 20 questions series.
○○Inviting business heads to present to the audit committee, ensuring members are kept up to date with business The Finance Professional
operations. Profile of the Future
• Strong finance function – The finance function is responsible for producing reliable and auditable information,
communicated through high quality corporate reporting and other information. The strength of the finance Key Skills Needed for
function is therefore critical. The audit committee need confidence that the finance function is fit for purpose and Technology Competence
require mechanisms to assess this.
• Strong internal audit function – Infusing subject matter experts into internal audit provides greater The Accountant Role in
understanding and depth within the function, which can then provide more effective support and where Effective Risk Management
necessary, technical advice to the audit committee.
• Effective communication – The nature of interactions that the audit committee has with the finance function Audit Quality and Audit
and both the internal and external auditors, can have an impact on audit quality.
• Professional skepticism – In considering disclosures from management, audit committee members need to apply
Professional Ethics
a degree of professional skepticism in order to provide effective and robust challenge of the information reported
to them, including consideration of whether that information is complete. IFAC’s Approach to
Next Steps Professional Accountants in
Business
• Continuing advocacy of the role of audit committees and PAIBs in ensuring confidence in business reporting and
risk management.
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8. Professional Ethics of the Finance Function:
Objective: Ensure a relevant Code of Ethics for Professional Accountants Opportunities and Challenges
Professional Skepticism Building Awareness of

The PAIB Committee maintains the strong view that professional skepticism, as well as professional judgement, Technology Developments
relates to all professional accountants regardless of their role. The Committee is therefore supportive of the
International Ethics Standards Board for Accountants (IESBA) longer-term follow up project to explore how aspects Future Finance Vision and
of professional skepticism apply more broadly to all professional accountants, and will be participating in their Development Roadmap
upcoming consultation process.
New resource from the International Accounting Education Standards Board (IAESB): Profile of the Future
All Professional Accountants Need to Include Skepticism in their Mindset
New resource from the International Ethics Standards Board for Accountants (IESBA): Key Skills Needed for
Revamped Code of Ethics for Professional Accountants http://www.ifac.org/news-events/2018-04/global-ethics-
board-releases-revamped-code-ethics-professional-accountants
Ethics Standards
The recent Monitoring Group proposals set out options for changes to the standard setting model, including Audit Quality and Audit
potentially developing a single independent board to develop auditing and assurance and audit-related ethics Committee Effectiveness
standards. This outcome would split ethics standards for auditors from ethics standards for accountants in business.
There are parallels between this and splitting professional skepticism and professional judgement for auditors and Professional Ethics
accountants in business, neither of which the PAIB Committee sees as being in the public interest.
The PAIB Committee therefore responded directly to the Monitoring Group to address this issue and highlight IFAC’s Approach to
the importance of retaining a united profession under one globally-accepted Code of Ethics for Professional Professional Accountants in
Business
Accountants. The current integrated model of a single standard setting body responsible for a Code of Ethics for
Professional Accountants, which applies to all professional accountants regardless of their employer or role conveys a
clear message to the public that all professional accountants are held to the same high ethics standards regardless of
their role in the financial reporting supply chain.
Next Steps
• Participation in the upcoming IESBA roundtable on professional skepticism and formal response to the professional
skepticism consultation paper.
• Continue to monitor developments in professional ethics
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9. IFAC’s Approach to Professional Accountants in Business of the Finance Function:
Objective: Develop the PAIB Committee’s contribution to IFAC and the profession Opportunities and Challenges
The PAIB Committee continues to innovate and support the profession to adapt in the context of increasingly Building Awareness of
complex operating environments driven by various factors, such as the Latest in Digital and
• Digital and technology disruption
• Increasing expectations for companies to be responsible corporate citizens and think long term Future Finance Vision and
Development Roadmap
• A shift to multi-capital thinking and reporting.
In reviewing how IFAC supports accountants in business to remain relevant, the PAIB Committee is further exploring The Finance Professional
Innovation Lab ways of working to build on its recent successes and strive for greater impact through its meeting Profile of the Future
approach and PAO and stakeholder engagement.
An Innovation Lab Approach Key Skills Needed for
To help the profession consider how it stewards itself in a changing world, Rachel Sinha, Founder, Systems Studio,
engaged the committee on systems thinking and social innovation lab working methods.
Key themes Effective Risk Management
The profession faces a series of challenges including emerging technology replacing jobs, public failures of ethics and
professionalism, diversity and disruptive demographics. Audit Quality and Audit
The global profession has an opportunity to lead versus follow in the following areas
• PAIBs providing leadership in shaping relationships between technology, data, business and society Professional Ethics
• PAIBs proactive and effective in collaboration and partnership with others
• PAOs and PAIBs demonstrating an ongoing willingness to transform and evolve. Professional Accountants in
An Innovation Lab is an effective way for the PAIB Committee to be an independent space for PAOs and others to Business
come together and innovate on PAIB issues. Such an approach involves engaging diverse stakeholders from within
and outside the profession. Through a diverse engagement of stakeholders and experimental approach, a Lab can
lead to more innovative solutions and interventions addressing challenges at a root-cause level. Example Labs include
the Financial Reporting Lab, FinTech Innovation Lab, Sustainable Finance Lab, and ICAEW’s Audit Futures.
As IFAC develops its strategic approach to championing professional accountants in business, it will continue to
think about the PAIB Committee’s engagement and working methods on the lines of an Innovation Lab format. The
next step is to develop a clear business model for the committee that crystallizes its purpose and how it creates value
in supporting IFAC and the profession.
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A Vision For The Finance Professional and Finance Function

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A VISION FOR THE FINANCE PROFESSIONAL

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SHARING KNOWLEDGE, IDEAS, AND EXPERIENCE

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Charles Tilley IFAC’s Approach to

Key Skills Needed for

The Accountant Role in

Audit Quality and Audit

Joyce Evans, Deputy City Treasurer/Director of Revenue, City of Kitchener, Canada

Section II: Update on Current Initiatives The Accountant Role in

Audit Quality and Audit

9. IFAC’s Approach to Professional Accountants in Business IFAC’s Approach to

As the world becomes more complex and new challenges arise,

Audit Quality and Audit

The Finance Professional

Explosive demand growth

○○Transformation through innovation - doing

Key Skills Needed for

Automation gaining momentum The Accountant Role in

The Finance Professional

Key Skills Needed for

The Accountant Role in

Audit Quality and Audit

Future Finance Vision and

The Finance Professional

Key Skills Needed for

Audit Quality and Audit

Action for PAOs

IN-MEMORY LIVE DISTRIBUTED

Key Skills Needed for

INTERNET OF THINGS MEANS ADVANCED ANALYTICS FOR

SPEED TO ACTION OVER ACCURACY

An Update on Enterprise Performance Management (EPM)

Future Finance Vision and

• Application of visuals and presentation

• Understanding of digital risk, data security and

Audit Quality and Audit

Professional Skepticism Building Awareness of

Next Meeting Exposure Drafts, Consultation Papers, and other IFAC

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